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What Carriers Don't Want You To Know About Texting
An anonymous reader writes "Randall Stross has just published a sobering article in The New York Times about how the four major US wireless carriers don't want anyone to know the actual cost structure of text message services to avoid public outrage over the doubling of a-la-carte per-message fees over the last three years. The truth is that text messages are 'stowaways' inside the control channel — bandwidth that is there whether it is used for texting or not — and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines. In essence it costs carriers practically nothing to transmit even trillions of text messages. When text usage goes up, the carriers don't even have to install new infrastructure as long as it is proportional to voice usage. This makes me dream of the day when there is real competition in the wireless industry, not this gang-of-four oligopoly."
High-fructose corn syrup. You've often gotta pay more for Coke if you want it with sugar.
If they need to send a short message to someone it's not like there's a viable alternative - it's really the only game in town.
And people wonder why I don't text...
I am TheRaven on Soylent News
Not really. In classical economic theory: the market price can be one of the following:
1. Essentially the cost of making the product (firm's economic profits are 0). This arises in the model of perfect competition only.
2. Each consumer pays the highest price this person can afford. This arises only in the model of monopoly with a perfect price discrimination.
3. Everyone pays a single price, but the price is set by the single producer for the purpose of maximizing this producers profits. This is the model of monopoly with no price discrimination.
4. Anything in between. Various models of oligopoly will render the equilibrium prices that are anything in between (1) and (3). There is no single model of oligopoly. So, each setting has to be analyzed separately (usually with the tools of game theory) based on the relevant assumptions.
No, receiving calls/texts is free.
While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.
You can also typically buy bundles of text messages, with say Verizon charging $5.00/month for 250 text messages (and other options as well)
Stupidity... has a habit of getting its way.
Is it true they even charge you for receiving calls in the states????
Yes, they do. And there's good reason for it.
In the US, most people can make "local" calls free of charge. The definition of "local" varies, but it is generally the town/city that you reside in and maybe the surrounding suburbs. To be semantically correct: it's not actually free... it's covered by a flat monthly rate. But, there is no per-minute rate.
Calls outside that area are considered "toll" calls. They are assessed a per-minute rate, although phone companies are now offering calls to the entire US for an additional flat monthly fee.
In some states, a toll call must be dialed differently. In mine, it must be preceded by a '1'. This is imposed by the public utility commission, to prevent a caller from claiming they didn't know it was a toll call that would assess additional charges.
Faced with the public expectation that "local" calls are free -- or at least no additional charge, the cell phone services in the US chose to assess airtime charges to the user of the cell phone, rather than the person that called them. Had they not done so, consumer acceptance of cell phones as a replacement for wire-line phones would have been inhibited.
(An aside: free mobile-to-mobile calling on the same network is also a standard feature in the US)
http://www.itproportal.com/articles/2008/05/13/text-messaging-costs-more-receiving-data-hubble/
http://www.physorg.com/news129793047.html
http://thelede.blogs.nytimes.com/2008/05/12/costs-of-text-messaging-vs-space-transmissions/
"If for any reason you're not satisfied with our service, I hate you."
WTF? Does that mean the US telcos are double dipping?!
Well, you have to understand the differences in evolution in telephone service. Traditionally in the USA, local phone calls are unmetered. That was never the case in Europe.
When the first radio phones started coming out(they weren't cellular yet), ALL calls were metered because you were paying for relatively expensive limited radio transmissions. Because such people were relatively rich, and didn't want to discourage calls too much with getting the equivalent of a 900 number, they accepted the charges.
Think of it as the tradition is that the owner of the cell phone pays for the radio transmission costs, outgoing or incoming. Thus the reason you get charged minutes for incoming as well as outgoing calls.
That's not to say that the charges for text messages aren't crazy. It's one of those things that I wouldn't be surprised that there's more bit traffic to charge for text messages than to send them. More expense to bill for a text message than to send one, etc...
I don't read AC A human right
Which is why students use text messages. It is nearly impossible to miss a student talking on their phone during class, but students have no problem holding their phone under their desk and texting during class without getting caught.
Centralization breaks the internet.
This has always been the case in Russia, though, but we don't pay for incoming calls & messages, either. We used to, but a few years ago the government intervened and mandated all cell providers to not charge for incoming (forcing them to strike up agreements to redistribute the payment to cover expenses on both sides in cross-network calls).
To the UK, it's normally 4 cents a minute (free if you have an unlimited plan). But, if you are calling a mobile phone in the UK, it's 34 cents a minute.
In France, it's 4 cents a minute vs. 21 cents a minute.
In Germany, it's 4 cents a minute vs. 31 cents a minute.
Here it can depend on cell phones because there's a lot of services that charge a flat rate for X No. of minutes. Both parties can be charged when you call mobile to mobile. Charges can range from free (if the person is on the same network or in a network of friends) or the individual rates. IOW, you're charged depending on your plan, they're charged depending on theirs. In my case I prefer the pay-as-you-go plan. If you don't call all the time it works out pretty economically. On my cell plan, for example, I pay $1 a day on the days I use it and 10 cents a minute to anywhere or 0 if I call another member with the same service. I spend about $150 a YEAR. While fixed minute packages may run cheaper per minute, Being that most run $40/month for the cheaper packages, it's a lot cheaper for me to do the pay-as-you-go and I don't have to worry about running over minute limits.
If you have a land line, it doesn't cost you any more to call a person's cell phone if it's a local number. It does cost the cell phone owner as stated above. However land line companies also compete with cells by offering a flat rate per month cost for both local and long distance, usually around $50/month.
Our biggest cell problem in the US is coverage. It depends on where you are as to which service has the best coverage.
Regarding the texting, it should be obvious: The price is high, not because it taxes the systems more, it's because texting is popular. How is this surprising? When something is popular or needed, the price goes up. When it's not, the opposite is true. This popularity allows the telco's to rake in additional profits and offer package deals with a guaranteed income. Sorry, but a company is not require to responsibly price things according to their cost. If you want texting prices to go down, then texting needs to become less popular or more competition needs to come in that offers cheaper or included texting.
If you've never been modded as "flamebait" or "troll," you've never tried to argue a minority viewpoint here!